Strategy Room 10-11
I'll be on Strategy Room at FoxNews.com Wednesday morning from 10-11.
Wretched Consumer Confidence Number Shreds Market
The Conference Board Consumer Confidence Index which had been on the rise for three consecutive months, declined sharply in June. The Index now stands at 52.9 (1985=100), down from 62.7 in May. The Present Situation Index decreased to 25.5 from 29.8. The Expectations Index declined to 71.2 from 84.6 last month.
Despite the raft of crummy economic news in recent days and weeks, no one was expecting such a steep decline.
But don't lose heart. The Obama administration promised us this would be the period of "peak impact" of the stimulus, so its carnage may soon begin to wane.
[The reading of 52.9 was] below the lowest projection of 71 economists surveyed by Bloomberg. The median projection was 62.5.
“Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence,” said Lynn Franco, Director of The Conference Board Consumer Research Center, in a statement.
Kagan Matches Wits With Would-Be "Peers"
Almost hard to listen to, as the nominee comes off so notably outmatched - though, as Allah notes, as Solicitor General, "She’s duty bound to defend whatever crappy law they toss in front of her with whatever crappy argument she can come up with. And this one’s plenty crappy..."
Weakness of case aside, Hot Air also recounts Kagan's unforced tactical error, which may have been enough to sink the Citizens United case (thus surrendering victory to free speech fans). If Obama's counting on his nominee to "sway" her fellow justices on tough cases, and this clip is indicative of her persuasive capacity, Kagan may be a delightful (if unwitting) boon to the court's conservative bloc.
Weakest New Home Sales In Recorded History
Malaisey number of the day: 300,000, down a whopping 32.7% from April's 446,000, which itself was revised down from the previous estimate of 504,000.
Economists were predicting a big drop, but not nearly so monstrous a plunge as this. In the wake of the artificial government stimulus associated with the now-expired homebuyers' tax credit, we've thus emerged into what seems an even more anemic housing market. May 2010 is now in the record books as the worst month for new home sales in the 47 years of record keeping.
Yes, the steep falloff is all the steeper because of planned transactions being shifted earlier in the year to take advantage of the tax credit, so the equilibrium rate is likely not quite so horrifying. But if we take solace in that fact, we need to revise downward our interpretation of prior months' sales, recognizing their artificially inflated levels as nothing more than taxpayer-subsidized, time-shifted sales, yielding no visibly sustainable goosing of the housing market.
UK, Germany Going On the Wagon. Obama Going Streaking Through the Quad and Into the Gymnasium.*Sigh*
Strategy Room 3-4
I'll be on Strategy Room at FoxNews.com today from 3-4 pm.
Violently Racist NYC Councilman Charles Barron
Has Never Heard Of IS SUDDENLY OUTRAGED BY Calls To Ban Deafening Soccer Horns
Long-time readers are all too familiar with this miserable excuse for a lawmaker and his proud history of race-based extremism and threats of violence.
Clad in a freshly pressed Dr. Evil ensemble, Charles Barron now shares with us his passionate crusade against vuvuzela bigotry... just as soon as he's informed of the existence of vuvuzelas.
President Has, Eats Cake
Obama: I "absolutely reject" the notion that the health care mandate is a tax increase!
Courts: Then states can sue to block it.
Obama: Um... okay, it's a tax increase.(HT: HA Headlines)
Jobless Claims Way Worse Than Expected
At the risk of turning this blog into a mopey-economic-data-point-a-day calendar, here's today's mopey economic data point.
The Labor Department said in its weekly report Thursday that initial claims for jobless benefits rose by 12,000 to 472,000 in the week ended June 12, bringing them back up to a level last seen in mid-May. Economists surveyed by Dow Jones Newswires had expected claims would fall by 6,000. The previous week's level was also revised upward, from 456,000 to 460,000.
In a more positive sign, however, the four-week moving average -- which aims to smooth volatility in the data -- fell slightly for the week ended June 12 by 500 to 463,500.
Claims lasting more than one week, meanwhile, increased for the week ending June 5. The increase came on the heels of a large decline of 234,000 continuing claims reported last Thursday for the week ending May 29.
The 12,000 rise is considerably worse than it sounds. As noted above, economists' consensus foresaw a decline of 6,000 from the previous week's unrevised data (which were revised upward by another 4,000). So the seasonally adjusted level (472,000) is 22,000 worse than what analysts had predicted (450,000), based on data that was only 6 days old. 4.4% worse.
As we pointed out last week, this week-to-week number is highly volatile, while the 4-week average makes for a somewhat less jumpy barometer. Even so, after rising for 4 straight weeks, that average ticked down just 500 (as the mid-May spike rolled out of the trailing range).
Meanwhile, 472,000 is still comfortably above where we began the year (454,000), despite Obama economic adviser Austin Goolsbee's February insistence that...
We can only hope this is the peak impact. Because if the stimulus fallout is still mounting, and with the aid of a potential economic shock from the oil spill and the asinine economic response thereto, Obama might just pull off the famously elusive double-dip after all.
"The stimulus is peaking in the, you know, around now and the first couple of quarters of this year is when it’s going into its peak impact on the economy..."
Brown Paper Packages Tied Up With Malaise
FedEx would like to cordially remind you that the economic recovery is more nebbish and sickly than we might've hoped.
FedEx expects its earnings per share to be anywhere from 85 cents to $1.05 per share. Analysts estimated that FedEx would bring in earnings of $1.05 per share.
FedEx also stated that it expects its revenue for 2011 to be between $4.40 and $5.00 a share. Following the trend, this estimate was below the consensus estimate of $5.06.
In pre-market trading, shares of FDX fell by 2.34%.
If FedEx provided the spark, the Commerce Department brought the gasoline. The department reported this morning that May housing starts fell 10% to their lowest level since December. What's more, starts of single-family homes plunged 17%, the largest percentage decline since 1991, to a seasonally adjusted rate of 468,000, the lowest in a year. The report was worse than the 7% decline that economists had expected. Adding insult to injury, April's starts were revised lower to a 659,000 rate from 672,000 previously estimated.
Yes, the housing fall-off followed the expiration of the homebuyer tax credit, but that expiration was fairly well-known among industry analysts. The worse-than-expected decline may lead some cynics to question whether government intervention truly does spark sustainable economic activity, or whether the disruptive effect of artificially front-loading demand and allocating resources by government fiat might instead have a net negative impact on long-term growth...
One way to find out: let's chuck another $50 billion into the pit and see what happens.
On Top Of It Since Day 1...
Rep. Bob Etheridge (D-NC) Defends Self From Menacing, Camera-Wielding College Kid
This is Etheridge's 7th term in Congress, but his district leans Republican. Hope you enjoyed your career, Congressman.
Last week, Democrat Congressman Bod Etheridge (D-NC2) attended a fundraiser headlined by Speaker Nancy Pelosi. He was asked by some students on the street whether he supported the “Obama Agenda.” He didn’t take it well.
Weekly Jobless Claims Tend To Confirm Stalled Recovery
Economists were predicting today's unemployment claims data to show a modest drop from 453,000 initial claims to around 448,000. Instead, they ticked up to 456,000 (boo). But the prior week's data was revised upward to 459,000, so this week actually showed an itsy decline after all (hooray?).
But you needn't worry your pretty little head messing about with the numbers for the salient bits. That's what the helpful AP is for.
[N]ew claims for unemployment insurance dipped slightly for the third straight week.
Why that sounds like a downright pattern!
Sadly, the mild and fledgling streak results from a spike in the famously volatile initial claims number in mid-May. If you hold your thumb up to the 4-week average instead (as do many outside the AP when sussing out short-term trends), you instead find initial claims rising for four straight weeks.
No, it's not a dreadful rise, but it ain't pretty either. This is the third quarter of recovery after all. These are supposed to be the layup months. Initial claims should be plummeting by 20,000-30,000 a month with the economy on autopilot. Instead, year-to-date, we've actually seen the number bump slightly higher (from 454,000 to 456,000).
It took the dreaded Bush economy all of three months after 9/11 to get back below these levels, and it maintained that lesser joblessness (excepting one anomalous week in March of the following year) for nearly seven years.
A Reminder From Ben Bernanke
Paul Krugman and his doggedly - if increasingly embarrassingly - Keynesian ilk are hysterical, spend-crazy blockheads* with little to no appreciation for the interplay of the capital markets and the economy.
Strategy Room 9:00
I'll be on Strategy Room at FoxNews.com tomorrow (Tuesday) at 9 am.
Private Sector Job Growth Stalls
Pay no attention to those temporary Census workers behind the curtain. The May jobs report was abysmal, with private payroll growth clocking in at just 41,000 - a steep drop from recent months and a small fraction of what's needed just to keep up with population growth.
Did you enjoy the recovery?
Update: At least the administration isn't pretending it managed to avoid snatching malaise from the jaws of recovery. Labor Secretary Hilda Solis just told CNBC we're currently in a "deep, deep recession."
Were consensus that she knew what she was talking about, we might've just seen another flash crash.